Developer-Friendly Banks?

tyen writes "Any suggestions for a 'developer-friendly' bank for small businesses? The banking world is awash in data protocols that business customers who are/have coders would find useful, like BAI to extract all the raw data from an ACH or SWIFT transfer. Unfortunately, the ones I have spoken with about this access are still stuck in the Dark Ages of computing; they price the access like only big companies still have the skills to tap into these interfaces. For example, one of the four US banks with a perfect trading record this past quarter quoted us USD five figures for access to several of our accounts via BAI format. Per year. After waiving sign-up fees. Are there any banks out there that have a more progressive attitude about letting small, entrepreneurial developers work with their business accounts in a more modern, dare we say automated, way? With big businesses demanding EFT integration from small business vendors, and globalization rewarding premiums to nimble, lean businesses that automate wherever possible, automating the retrieval of this information (which is not available in consumer-oriented access like OFX) becomes an increasingly pressing issue for the small guys."

Comments

What do you expect...

[frank_adrian314159]

... they're in it for the money.

Very few small clients will access their accounts in that way. As such, the service is priced with the large client in mind. They will not drop the fees for a small client because then the larger clients would insist that they drop the fees for them, too. Plus, it's a pain in the butt to administer the "small fish" they might pull in by lowering their fees.

Tell you what... You think this is a brilliant way to make money? Open your own bank. It's actually legal (and relatively easy) in this country. It's a good time to open a small bank, too - people are sick of the big banks. Find a backer and let them know that there's this underserved banking market out there. I'm sure you'll find plenty of takers if the idea is a good one.

But, in general, the main reason a banking service isn't offered to you is because the service isn't profitable enough to offer it to the market you're part of.

Re:What do you expect...

[rjlieb]

Tell you what... You think this is a brilliant way to make money? Open your own bank.

Really? Have you done it? Can you point me to somebody who's done it?

I've been directly involved in the creation of two banks in my career and indirectly involved in a half-dozen more. Detail vary, but you generally need to raise less than $10 million. You also need a lot of patience. New banks take years to start making money.

DIY Credit Union

[Legendre]

Roll-out your own credit union for geeks. I'd be interested in a bank with the services you've described. I'm absolutely sick of big banks and their big fees for even minor infractions.

Re:DIY Credit Union

[PopeRatzo]

I'm absolutely sick of big banks and their big fees for even minor infractions.

I'm not sure what your plans are for a bank that would use the protocols that you describe, but I can tell you that as a small business, the one that is most "friendly" to me is the one that doesn't structure its fees and accounts to milk you for every transaction.

There was actually a time in this country, before "deregulation" when banks made money from taking in deposits, lending that money out and charging interest. They would pay you compound interest for the money that you deposited with them. Sometimes, they'd give you a toaster or a blender on top of the compound interest

That was it: deposits and loans. And they were able to get rich beyond imagining from that simple, honest business model. They built huge, ornate buildings with cupolas and pillars and marble floors that squeaked when you walked on them. There made so much money that they built gilded temples with a tiny fraction of the profits. Generation after generation, they just got rich, bless their hearts.

But then came "deregulation" when banks decided that the unimaginable wealth they could accumulate from the "deposits and loans" model was just not sexy enough. They needed more. Their shareholders demanded more. They not only needed to make even greater wealth, but the rate at which they made tons of money had to increase every single quarter.

Flash forward a few decades, and banks don't really care for deposits and loans any more, because there are these exotic, sexy bits of fiction called "derivatives". They are the banking equivalent of scratch-off Lotto tickets. They fucked it up so badly that the entire economy went into a tailspin, from which we are only now beginning to recover. They fucked things up so badly that they can't even make money from the old-fashioned "deposit and loan" model that worked so well for so long, so now they invented a new profit center, known as "fees". But since their customers have things like computers and calculators and other modern tools for adding up columns of numbers, they have to make these fees hidden and confusing, like ninjas, so that unless you are very, very careful (and maybe even then) you will end up paying a fee. For example, for years my business account has been "free" as long as I keep a certain balance. Then, one day, in a codicil buried three pages deep in a special agreement rider that they mentioned on the back side of page 3 of my monthly statement, they said that unless I used the debit card for that business account at least 5 times within every month, I would be charged $100 for the privilege of letting them hold my money. Further, the "month" is counted not the way we count months, from say April 1 to May 1, but from some shifting day which is tied to the statement period. And by the way, that "month" ends at the open of business tomorrow, so sorry, but you've been charged $100. Don't worry, though, because we deducted it from your account without mentioning it to you before. If it wasn't for a lady that I went to high school with who works at the bank who clued me, I'd never have known about this little trick and would have been hit with that $100 at least once, if not for several months because I didn't expect this kind of sleazy behavior from a business with such a spiffy and noble-looking building with marble floors, so I don't pour over my monthly statements like the Torah, because the only people who can use the account are me and my wife and I know how much money is supposed to be there, give or take, so if it's in the ballpark, I assume that money isn't being funneled out with such arcane practices.

When President Obama and the liberal Democrats in congress proposed requiring the banks to actually disclose this innovative profit center known as "fees", there immediately went up a hue and cry that these regulations were Marxist and Communist and Fascist and Czarist and probably Muslim in some secret way, because

Re:DIY Credit Union

[gd2shoe]

Many of those derivatives really are treated as lotto tickets (you brought up options), and the those MBS tied to the CDS really were sold in a fictitious way (using imaginary non-truths). Yes, GPP likes to talk. That doesn't make him wrong.

Do you work for Goldman Sachs? You sound just like them.

Be careful with BAI

[Anonymous Coward]

I overheard this conversation between some programmers in my company about BAI, It was pretty heated. What I namely remember is:

Ok! Ok! I must have, I must have put a decimal point in the wrong place
or something. Shit. I always do that. I always mess up some mundane detail.

I can't remember what happened to them... It was around the time that we had a big fire at our main office.

The reality of the situation.

[quietwalker]

Disclaimer: I write financial software for a living.

First, I don't see why OFX can't be used for that purpose. You could manage several hundred accounts, payroll, billpay, collections, wire transfers, funds management, etc. Not only that, it's two-way. It's not just displaying account data, it allows you to perform the actual transactions. I know of some payroll processing centers that use OFX for exactly this - either it goes to printer or it goes electronic.

Second, because there is no salable demand for individuals requesting the raw file formats for the backend transfers, those features don't exist. This is common sense - what motivation exists for a company to spend the time and effort providing a feature if there is no money attached to it.

Third, certification. There is quite a bit of hullabaloo in the banking industry about certification, and they're serious. See, there's not a lot of security in the banking world. They rely on hard connections, network separation, and effectively, trust. What they DO have though, is auditing trails. They might not be able to stop a fraudulent ATM transaction, but they can tell you every node, clearing house, third party processor or financial institution it went through. Certification is the thing that allows them to reasonably trust members in their transactional world - you can't just show up with homegrown software and hook right in.

Last, as you said, "The banking world is awash in data protocols". Lemme tell you something - the raw protocols are only about 1/20'th of what goes on. No protocol is perfect, and many systems have what you or I might consider 'undocumented features' that are handled by clever manipulation of the protocol (aka, hacks). The paper description, for example, of the ACH file format can be compressed into about 6 pages. There is a two volume set of books, each about 300 pages, of small print, so thin as to be nearly transparent pages that actually describes how those 8 pages work.

That's one protocol. There are dozens of major ones, and additional complexities when you add in feature specific cores or sinks (back end systems that banks use to store the actual data on, like those provided by MISER or Fiserv )- do you support overdraft protection, provide memo services (a hold against an account for an amount prior to it's actual processing), and if so, which of the dozen ways do you provide that information?

So in the end;
* no real financial benefit to providing that access (especially when you say you don't want to pay XD )
* no certification to provide that access
* actual software knowledge requires domain knowledge many magnitudes greater than just file formats, including per-FI non-public knowledge

last and not the least important items not discussed above;
* financial institutions are slow movers when it comes to adopting technology.
* early adopters are NEVER the small banks, and they always require a hefty ($$$$) reason to include it.

So it could be done - and probably will in the next 20 years or so - but not today. ...

as an aside,

The reason you'd be getting billed 5 figures for access is because they'd end up assigning someone to manually pull your ACH records out of each daily batch and save them to one side. Manually. They may even need to have someone actually type the new entries in (separation of networks, removable media would be disallowed - of course.)